According to the Wall St. Journal, the U.S. Department of Justice
The WSJ says the DOJ is looking at “capping the volume of Google ads Yahoo would use, assurances that Yahoo would continue to compete in search ads, and a reporting mechanism to ensure compliance.” It would also like to impose “price constraints” in an effort to ensure advertising rates don’t skyrocket after the deal is implemented. Taken together, they answer most of the questions raised by opponents of the deal.
While Google and Yahoo have always said they intended for Yahoo to remain a strong competitor and that Yahoo would use Google’s ads only when it didn’t have any of its own, the DOJ and other opponents see things differently. Since Yahoo gets far more revenue from Google’s ads than from its own, over time, Yahoo would probably tend to use more of them and slowly whittle away at its own marketshare. The DOJ’s conditions aim to prevent that scenario. If Google and Yahoo truly feel the deal is aimed at making Yahoo a stronger competitor, they should have no problem conceding to the DOJ’s wishes. If the WSJ’s facts are right, the ball is in Google/Yahoo’s court, and it will be interesting to see how they play it.
